Last week, Griffith University’s Vlado Vivoda argued that renewable energy “makes no economic or political sense” for Australia.

While we welcome Vivoda’s contribution to the national energy policy debate, the conclusions he draws fail to account for the clear imperatives for quickening the pace of renewable energy deployment.

First and foremost of these imperatives is climate change. Given the prominence of climate change in the political sphere, and the fact that it is a key rationale for advancing renewable energy technologies, it is puzzling that Vivoda discusses Australia’s energy future without acknowledging the implications of climate change.

The bulk of Australia’s carbon emissions are produced by the stationary energy sector. To address climate change, this sector will have to shift from fossil fuels and embrace zero-carbon energy sources.

In a speech to the National Press Club yesterday, Climate Minister Greg Combet announced that the government would devote half of the carbon tax revenue for compensating households.

By promising that the carbon price will be a financial boon for Australian households, Labor is attempting to counter Tony Abbott’s populist crusade against carbon pricing.

For weeks, Abbott and his Coalition allies backed by the polluting industries have mounted a fear-mongering campaign. The story the government wants to tell now is that while the Opposition leader is content to make exaggerated claims about economic ruin, Labor will make sure that you’re economically better off with a carbon price. Labor is determined to win the support of ‘hip-pocket voters’ to take the edge off Abbott’s mob.

The Gillard government is setting up another interesting dynamic. By announcing that householders will be ‘overcompensated’ for the impacts of carbon pricing, they have set a limit for calls for a low price and industry exemptions. The logic goes something like this: The higher the price on carbon, the more ‘overcompensation’ one will receive; conversely, the lower the price or narrower the coverage, the smaller the compensation.

Politics aside, the question now remains – what should they do with the remainder of the revenue? To cement its credibility on climate change the Gillard government must commit to investing the remaining share of the carbon price revenue to lay the foundations of a zero emissions economy. The government has a responsibility to protect low-income householders from carbon price impacts, but it also has a responsibility to invest in decarbonising Australia.

On the heels of filing a complaint with the WTO against China’s subsidies for its domestic wind turbine manufacturers, President Obama signed an appropriations law that requires the Department of Defense to purchase American-made solar panels. The move appears to be the first instance of America leveraging its WTO complaint to boost its clean technology industry, and shows that the US is beginning to take the clean energy race seriously.

Some will argue that the ‘buy American’ provision smacks of hypocrisy—that the administration is as guilty of the same behaviour it has criticised China for. Others will argue that the measure counters the Chinese subsidies and is a legitimate way to bolster the US clean energy sector in an uneven playing field. Either way, the move shines a spotlight on the role of military procurement.

Climate change is a wicked problem. It will take an unparalleled amount of human effort to address.

While it’s important for the public to be aware of the risks of runaway climate change, focusing narrowly on threats and evoking apocalyptic rhetoric, as Melbourne writer Doug Hendrie did yesterday, is not helpful. It might be good for scaring the general public senseless, but does not create the conditions needed to deliver action on climate change. For that we need a positive vision of our future.

Recently, the Climate Institute released a report comparing the climate and energy policies of six major economies. The joint Climate Institute/Vivid Economics report (PDF) calculates the ‘carbon price equivalents’ of non-price-based initiatives like clean energy investments, renewable energy mandates, feed-in tariffs, and other regulatory measures, for example. Whether it makes sense to shoehorn these distinct policies into the carbon price model is worthy of discussion, but for now I’d like to look at the key talking point in the communications surrounding this report.

The Climate Institute claim that carbon pricing is key for ‘driving competitiveness in the clean energy economy.’ This might be the case. But is it the same thing as driving progress towards a clean energy economy? To gain a perspective on this question, I asked leading energy policy expert Alan Pears what he thought.

It’s time for the government and climate change advocates to stop obsessing over carbon pricing and get behind an investment-centred climate policy.

Polling released last week, as PM Gillard announced the members of her government’s Carbon Pricing Climate Change Committee, showed that just 37% of Australians think it is very important to implement an ETS (or other carbon-pricing measures) to address climate change. When we consider the prominence of emissions trading in contemporary climate change policy debates in Australia, it is fair to say the measure is still struggling to win strong public support.

Fresh questions about the efficacy of an emissions trading scheme have been raised, after a new analysis by the UK-based non-government organisation, Sandbag, revealed major flaws with the European Union’s emissions trading scheme. This comes as the debate about climate change policy and carbon pricing gathers pace in Australia.

The Cap or Trap? (pdf) report finds that the second phase of the European ETS will fail to deliver significant carbon reductions. This will be a surprising outcome for many Australians who have been led to believe that emissions trading is ‘decarbonising’ Europe. According to report author Damien Morris:

…the ETS is on course to require savings of, at best, a miniscule 32 million tonnes of emissions between 2008-2012, despite covering 12,000 installations and 1.9 billion tonnes of emissions annually. Regulating a single power station over the same period could have had a greater impact.

In a speech yesterday at Harvard’s John F. Kennedy School of Government, energy secretary Steven Chu again repeated his declaration that nothing less than a technological “revolution” is necessary to meet America’s energy challenge and to ensure the US position as a leading global economic power.

In his book, China Inc.: How the Rise of the Next Superpower Challenges America and the World, Tim Fishman explores the rise of China and highlights areas where the Chinese have out-competed, are gaining ground, or seek to out-compete US industries. When we consider the recent developments, including China’s investment in clean energy from ‘green’ stimulus measures exceeding that of the US, and enacting fuel efficiency standards beyond those recently approved by Congress, it seems this could represent an emerging trend.

While Fishman acknowledges that ‘[t]he ability of American industry to stay ahead of its competition rests on the national gifts and resources that the United States devotes to innovation’, he warns that the innovation gap is ‘beginning to narrow’.